Business Editors Need to Get a Life

by Christopher M. Wright

Should business editors pay attention to a make-believe computer world where animal and fantasy characters adorn themselves in cool clothing and hang out in virtual dance clubs? To hear banquet presenters Rob Freedman and Dave Levinson tell it, half the Fortune 500 thinks so.

Love it or hate it, the virtual world Second Life provoked strong reactions from the audience at ASBPE's Central South-East Region Awards Banquet held July 12, 2007 in Washington, D.C. Comments ranged from profound skepticism ['you guys are way ahead of yourselves'] to appreciation for 'the best program the chapter has ever put on.'

Freedman is a past national president of ASBPE and an editor at Realtor Magazine (National Association of Realtors). His forthcoming book, Second Life Business Strategies, will be published by McGraw-Hill. Levinson, formerly of AOL, is CEO of Cranial Tap in Round Hill, Va., a full-service virtual world development firm which builds locations in Second Life for business clients.

Second Life was created in 2003 by Linden Lab (San Francisco) and is accessed by a special browser downloadable for free from the Second Life website []. Second Life residents create an avatar (virtual person) which they move around the world trying to meet other avatars. "And then they try and ..., you have to use your imagination here...", Freedman said, provoking laughter. A lot of virtual business is built up around this activity - buying clothes and real estate, going out to virtual concerts, etc. "In order to develop a relationship, your avatar has to look good, so you've got to buy a lot of clothes, you've got to have a cool pad, and you've got to furnish it with cool stuff," he said. You can make these things with the 3-D modeling tools provided. "Or you can hire someone like Dave [Levinson] to do that for you to get that professional look," Freedman said.

But it's not all fun and games for IBM, GM, H&R Block, Coldwell Banker, and other big businesses that have established a presence in Second Life. "They're interested in using the platform to promote their business," Freedman said. Strategies vary - Starwood Hotels built a facsimile of its latest hotel design in Second Life and adopted many of the suggestions avatars made for changing the rooms and amenities. Universities and other organizations are using Second Life as a meeting place and teaching tool. As an alternative to conference calls in the real world, avatars enter virtual conference rooms and watch PowerPoint or video presentations in Second Life. Participants pay better attention, Freedman said, because they're not as tempted to multitask as they do during conference calls.

Business and editorial use will only expand as the technology evolves, Freedman said, so business editors need to pay attention. It will become possible for a homebuilder magazine to sponsor a virtual workshop on building techniques for its readers in Second Life, demonstrating with hands-on material how to install solar panels on a roof, for example.

Second Life is growing by leaps and bounds, Levinson said. There were 30,000 registered users in June 2005, 2.26 million at the end of 2006, and more than 8 million by July 2007. The site's success is due in part to the fact that the make-believe economy is based on the real-world economy, he said. Second Life residents pay for virtual goods and services with 'Linden Dollars' which are convertible into real U.S. currency under a floating exchange rate. Virtual clothing currently accounts for 40 percent of total expenditures in Second Life, he said. The remainder is spent in virtual shopping malls and island resorts, or on construction, virtual sex services, weapons, and art, among other items.

"Second Life is the first indication that the mass consumer market is interested in virtual worlds," Levinson said. Real estate agents and other business professionals are making all or part of their real-world livelihood serving customers in Second Life. "Some entrepreneurial users generate a six-figure income based on the objects they create and sell," he said.

"Cranial Tap believes that this space represents what is next for online entertainment, socialization, and business opportunity," Levinson said. Apparently, so do NBC, Fox, and Sony, among the media-related firms that have set up shop in Second Life. "They all understand that consumer adoption of this space is important, if not revolutionary," he said.

While some big companies use Second Life to promote their brand, others sell virtual reproductions of their real-world offerings. There are also interactive movie sets, virtual banks that pay interest, virtual stock exchanges with IPOs and daily trading, in-world interviews for real-life positions, and a virtual military base that facilitates interaction between family members separated by war. "Their characters can meet in a visual way, hug, and dance," Levinson said.

Three-quarters of the user base is outside the U.S. Europe and Brazil are heavily represented. "Appeal is absolutely global," Levinson said. A translation tool allows speakers of the 12 most common languages to communicate in real-time with each other. Second Life is a "a platform where humanity from different places on earth can interact in ways never before possible and, to me, that's amazing," Levinson said.

In the Q&A session that followed, it was brought out that there are other virtual worlds (Google may get into the act), and some are more reality-based. Fantasy or reality, each will draw a different types of user.

The subject of sabotage in Second Life was raised. Interlopers sometimes place objects on someone else's land in Second Life but, Levinson said, the problem can be minimized if the owners utilize the permissions settings in the software to prevent unauthorized construction. It's also possible to restrict your space, keep it private, and only let in who you want. Second Life is not lawless territory, Levinson said, and breaking real-world laws will get you into trouble.

One editor indicated that it's taken years just for his readers to become accustomed to visiting his magazine's Web portal. It's unrealistic to expect them to immerse themselves in a virtual world. But, as Rob Freedman argued - and here's the point for editors - Second Life is a way to reach a younger audience. Look ahead ten years when the video game generation comes of age. Your younger readers "will be totally acclimated to virtual environments," Freedman said. Not only that, an audience member piped in, they will require a different context than previous generations, such as a virtual world, before they will even be willing to take in new content from you. The technology is not going away, it was argued.

Mr. Wright is a freelance writer, D.C. ASBPE Board Member, and winner of ASBPE Regional Bronze. He specializes in investment and technology topics for national and international clients. []

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